Termination of the loan agreement
Most often it is random events that make us want to terminate the loan agreement. Unexpected win in the competition, inheritance, bonus at work – there can be many reasons for that and we don’t really have to explain the lender to any of them. What is important to us is the fact that thanks to such an injection of cash, we no longer need financial support from any institution. The fact that we have already signed the contract does not prejudge the matter. If we only fit within 14 days of its conclusion, we have a chance (and right!) To depart from it. Before we get into the specifics, let’s explain the difference between termination and termination and withdrawal from the contract. For us they are synonyms, but from the legal side – completely different concepts.
Termination of the contract is based on the agreement of the parties. This can occur at any time during its duration, if both parties agree. If we opt for a unilateral termination of the contract, we must take into account the consequences, e.g. additional fees or a financial penalty, in connection with submitting the notice. Withdrawal from the contract, in turn, causes the withdrawal of the effects of its signing without major consequences, provided that we meet the deadline of 14 days from the date when the money was credited to our account. This works in the same way as returning products purchased online. We can also cancel the loan or credit agreement within the specified period.
Termination of the loan by the bank
We started with the term contract term, so now a few words about this procedure. It cannot be denied that this is a situation when one of the parties is forced to accept the fact of termination of cooperation. There are a few rules to keep in mind to avoid problems. First of all, consumer loan law does not explicitly mention the possibility of terminating the contract before its term ends. The option of early repayment is most often mentioned, although it is worth noting that this is not the termination of the contract but its early fulfillment.
In fact, the termination of a loan or credit agreement can only occur on the basis of the arrangements contained in the agreement we signed. If the bank or lending company has not written something like this in the document, we have nothing else to do but to meet the contractual term. Unless we are ready to bear considerable financial consequences. The institution that grants us the loan is in a much better position. It is enough that we will not pay the next installments. This will be a reason to terminate the contract and at the same time demand immediate settlement of the entire amount due. The act assumes that we will have 30 days for this, but remember that, for example, a parabank will charge us standard costs and interest for each day of delay. After the expiry of the abovementioned 30 days, the case may be referred to a court which will order the initiation of enforcement proceedings, pursuant to which it will take a bank account, real estate, cars etc. The next step is to enter the debtor in the BIK, BIG, KRD or ERIF databases and, thus, to close the road to further loan agreements.
Withdrawal from the loan agreement
Withdrawal from the loan agreement may have a contractual or statutory dimension. Even if we decided to pay online (this is currently the most popular option), this does not change the fact that, according to the provisions of the Civil Code, as consumers we have the right to return the loan without giving a reason. We have 14 days from the time we receive the money. This is a standard procedure, but it happens that some lenders suggest a different term – but it will never be shorter than the statutory 14 days.
During this time, we must send a self-signed statement to the address of the financial institution, in which we indicate that we are withdrawing from the contract under our right. It is best to send them by registered mail with acknowledgment of receipt (the date of the postmark counts), and even better – submit it in person at the lender’s office and obtain confirmation of this fact in writing, on a copy of the application. When the bank or loan company accepts it, we have 30 days to return the loan you have taken. Apart from the interest for the time of using the service, which the institution may charge us, we do not incur any other costs. And if this has already happened, the lender is obliged to return them to us in full.
Please note that this procedure does not look the same in all establishments. When choosing, for example, a loan from Hypocredit, only in the case of the first payday loan we have the right to withdraw from the contract within 14 days. We won’t be able to do that next time. This is because Hypocredit, unlike other companies, constructed his loan agreements. They are more similar to revolving loans. They are only valid after signing the contract, which Hypocredit sends to the borrower’s home and which he must send back. It gives its clients a chance to terminate this contract, but only with two weeks’ notice, so if the loan was taken for 30 days, it doesn’t make any sense.
Termination of the loan and loan repayment
Termination or withdrawal from the loan agreement does not release us from the obligation to pay the amounts due in the days when we used the money of the institution. We mentioned that we have 30 days statutory deadline under the Consumer Credit Act. This right may be exercised by natural persons who do not take out loans in connection with their business activity. It doesn’t matter if we borrowed money from a bank or other financial institution. And although this provision also applies to parabanks, they have their own internal rules, on the basis of which they can request a return of the loan within 3 days of withdrawal from the contract. If this does not happen, the request to withdraw from the contract will be treated as ineffective. All arrangements contained in the contract will not expire. We will protect ourselves against such a situation if we carefully study the regulations and tables of fees and commissions of the company granting us credit.
What about if 14 days have passed, when we had the chance to withdraw from the contract? Certainly, this will require us to comply with more regulations, but this is not impossible. Every well-structured agreement assumes such an eventuality and creates for this purpose provisions specifying the rights of both parties and examples of further proceedings.